Monticello council reinstates step system for employee pay

Monticello council members voted Monday night to reinstate a performance-based step system for city employee salary increases, but only for the current year.
City leaders voted 3-1 to approve a staff recommendation supporting reinstatement. Councilmember Tom Perrault voted no. Councilmember Glen Posusta did not cast a vote after council members listened to a brief background presentation by City Adminstrator Jeff O’Neill that included information prepared by Finance Director Wayne Oberg and Human Resources Manager Tracy Ergen. Monticello’s pay equity program and associated step system has been in place since 2008. During the last four years, O’Neill said economic conditions gave rise to city council action to hold cost-of- living adjustments and suspend step increases.
In 2010, city leaders approved half-steps for employees with favorable performance reviews. Steps were fully frozen for 2011-2012.
According to O’Neill, most city staffers understood the need to freeze steps and took it with stride; however, he said it was important for the council to eventually bring back the step system to reward employees who have done more with less as well as reward those who have earned a step increase based on an annual performance review.
According to O’Neill, approximately 41 percent of Monticello’s city staff is at or below Step 4 with the majority of those employees having been hired during or after 2008. Approximately 72 percent of staff have not yet reached the top of the Grade 8 pay scale.
Without a step freeze, it would take a newly hired eligible employee 7.5 years to reach Step 8 which is the top of their grade, O’Neill stated in a reference and background memo. While a handful of cities have frozen steps for a year, the majority have continued to award step increases. In 2008,city pay ranges were equal to pay provided by comparable cities.
Since that time, the Monticello pay scale has dropped 4 percent against neighboring city averages. O’Neill said the city’s personnel committee has noted that it is important to provide step increases to those that deserve the increase based on performance. Any approved change should not be construed as a longevity pay increase.
Eligibility for a step increase occurs at the time of the employee’s anniversary date. The $55,000 cost to reinstate the program is included in the 2013 budget.
The council has been vigilant in maintaining a pay scale that’s not out of control, O’Neill said. “City staff has accepted that challenge, and would appreciate it if the council added the step increases back in.” Mayor Clint Herbst said the personnel committee wanted department heads to start cross-training employees as a cost savings measure. “We’d like to see a lot of that,” Herbst said. “We’d like to have them learn more than one position.”
Councilmember Brian Stumpf used the example of O’Neill and Community Development Director Angela Schumann performing economic development double-duty tasks in the absence of a full-time person in that key city position.
“It’s been a challenge,” Stumpf said. “It’s been wonderful to have them there, but we’ve been doing more with less and trying to get by.” He added: We have a great group of dedicated employees. It’s time for us to show some gratitude and step up to the plate.” Perrault disagreed.
“I’m not sold on it.” Perrault said, referring to staff’s recommendation to reinstate step increases. “Not this year. Next year.” He added: “I was surprised this was on the council agenda. Six or seven months ago, we approved a 2 percent cost-of-living increase.” Posusta asked O’Neill to explain the city’s COLA history.
Movement to a higher point in the range via a step increase requires demonstration of growth and development in the position, O’Neill said. The step system is different from COLA adjustments, which actually adjust pay ranges for grades based on comparable cities and the given economic situation. Monticello city practice has been to bring employees in low within their grade when possible, with the expectation they will have the opportunity to earn their way through the steps within their assigned grade. “We can hire employees at a lower level and give them the encouragement to eventually work their way up,” O’Neill said.